Compliance Rules for Commercial Loans Secured by Real Estate

Susan Costonis

Susan Costonis is a compliance consultant and trainer. She specializes in compliance management along with deposit and lending regulatory training.

Susan has successfully managed compliance programs and exams for institutions that ranged from a community bank to large multi-state bank holding companies. She has been a compliance officer for institutions supervised by the OCC, FDIC, and Federal Reserve. Susan has been a Certified Regulatory Compliance Manager since 1998, completed the ABA Graduate Compliance School, and graduated from the University of Akron and the Graduate Banking School of the University of Colorado. She regularly presents to financial institution audiences in several states and “translates” complex regulations into simple concepts by using humor and real life examples.

Susan's Other Events

OnDemand

Which regulations apply to commercial loans that are secured by real estate? Are there any exceptions when the real estate is taken as "an abundance of caution"? Do the commercial lenders and support staff at your bank understand the data collection required for HMDA reportable applications? Is a written application required for a business purpose loan? Join this fast-paced webinar to understand the application process with step by step instructions and actual examples that explain the requirements of applicable regulations in terms that are easy to understand. New HMDA rules became effective on January 1, 2018. If your financial institution is required to report under the new rules, are you in compliance for covered business purpose applications?

Covered Topics:

What factors determine if the application is for business purpose or consumer purpose?

What are the compliance requirements when real estate is taken as collateral?

Review of the required disclosure for the "Right to Receive a Copy of Appraisal." Who gets the notice and what are the timing rules? This DOES apply to 1st lien loans of 1-4 units, regardless of purpose; there is no "business-purpose" exception.

What are some common compliance violations in the commercial loan area when real estate has been taken as collateral?

Review of the HMDA requirements and review of the changes to business purpose loans for the extensive HMDA rules that became effective January 1, 2018.

Coverage issues – Which COMMERCIAL applications are covered loans that require data to be collected at the time of application? What types of dwellings are included? Best practices for documenting that applications foragricultural purpose are EXEMPT for HMDA reporting in 2018. However, other compliance requirements still apply for real estate secured agricultural loans!

What data will be reported? What data will be excluded for business applications? Business purpose loans have many fields that are “not applicable”.

Suggestions for potential problems with collecting, reporting, and validating the data fields for “applicant” and applications in these required fields and understanding when they may NOT be reported:

Age for applicants who are “natural persons”, for example a sole proprietor

Income – when is reporting required?

Reasons for denial – potential problem area for commercial applications

Application date

Ethnicity, race and sex

Disaggregation of ethnicity and race

Flood insurance violations can be costly. What are some of the unique challenges with commercial buildings and collateral?

There are four "trip wire" events for flood insurance. Learn about the revised rules for "detached structures on residential property", this can include business purpose loans.

BONUS TOOLS

Matrix of 28 loan types; required disclosures for both consumer and commercial loans with explanations about real estate secured loans.

Checklists that outline which compliance regulations apply to commercial credit and the exemptions for certain rules.

HMDA flowchart and tips for 2018 reporting activity

Flood insurance resources

Who Should Attend?

This informative session is designed for Commercial Lenders, loan assistants and processors, loan operations staff, compliance officers, and auditors.

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Event Description

Which regulations apply to commercial loans that are secured by real estate? Are there any exceptions when the real estate is taken as "an abundance of caution"? Do the commercial lenders and support staff at your bank understand the data collection required for HMDA reportable applications? Is a written application required for a business purpose loan? Join this fast-paced webinar to understand the application process with step by step instructions and actual examples that explain the requirements of applicable regulations in terms that are easy to understand. New HMDA rules became effective on January 1, 2018. If your financial institution is required to report under the new rules, are you in compliance for covered business purpose applications?

Covered Topics:

What factors determine if the application is for business purpose or consumer purpose?

What are the compliance requirements when real estate is taken as collateral?

Review of the required disclosure for the "Right to Receive a Copy of Appraisal." Who gets the notice and what are the timing rules? This DOES apply to 1st lien loans of 1-4 units, regardless of purpose; there is no "business-purpose" exception.

What are some common compliance violations in the commercial loan area when real estate has been taken as collateral?

Review of the HMDA requirements and review of the changes to business purpose loans for the extensive HMDA rules that became effective January 1, 2018.

Coverage issues – Which COMMERCIAL applications are covered loans that require data to be collected at the time of application? What types of dwellings are included? Best practices for documenting that applications foragricultural purpose are EXEMPT for HMDA reporting in 2018. However, other compliance requirements still apply for real estate secured agricultural loans!

What data will be reported? What data will be excluded for business applications? Business purpose loans have many fields that are “not applicable”.

Suggestions for potential problems with collecting, reporting, and validating the data fields for “applicant” and applications in these required fields and understanding when they may NOT be reported:

Age for applicants who are “natural persons”, for example a sole proprietor

Income – when is reporting required?

Reasons for denial – potential problem area for commercial applications

Application date

Ethnicity, race and sex

Disaggregation of ethnicity and race

Flood insurance violations can be costly. What are some of the unique challenges with commercial buildings and collateral?

There are four "trip wire" events for flood insurance. Learn about the revised rules for "detached structures on residential property", this can include business purpose loans.

BONUS TOOLS

Matrix of 28 loan types; required disclosures for both consumer and commercial loans with explanations about real estate secured loans.

Checklists that outline which compliance regulations apply to commercial credit and the exemptions for certain rules.

HMDA flowchart and tips for 2018 reporting activity

Flood insurance resources

Who Should Attend?

This informative session is designed for Commercial Lenders, loan assistants and processors, loan operations staff, compliance officers, and auditors.

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